Amazon earns millions from UK universities

Edward Lander reports on the results of a Freedom of Information request made by Ethical Consumer in 2022

29th July 2022

Our calculations show that higher education has become more reliant on Amazon in the past three years, with 63% of universities increasing their purchasing with the company.

The tech giant has faced criticism for its tax avoidance, poor working conditions for warehouse employees, and lack of commitments around tackling modern slavery and human trafficking. Amazon has also been accused of greenwashing its sustainability credentials by promoting solar farms and vague climate pledges, while sending millions of items of new and unused stock to landfill.

Given these concerns, university staff have questioned whether making significant purchases through Amazon undermines efforts in the higher education sector to champion sustainability and human rights issues.

“Universities are seeking to present themselves as leaders in sustainability and ethics,” said Martin Satchwell, head of procurement at De Montfort University (DMU). “The appointment of a supplier with these underpinning practices is disappointing.”

The results from our FOI request

Ethical Consumer sent out a Freedom of Information (FOI) request to 134 UK universities in February 2022 to find out how much the UK higher education sector has spent on Amazon in recent years. 93 universities replied with data*. Those that did not reply, which included vast organisations like Oxford and Cambridge, are listed in our 'Transparency Hall of Shame' list below.

A lot of money spent with Amazon

The research found that the average annual Amazon spend for UK universities reached £151,728.93 in 2021 and comprised 0.18% of their annual procurement expenses.

We have calculated that Amazon secured more than £20 million of income from UK universities in that year.

This is despite Ethical Consumer's own figures showing that Amazon's aggressive tax avoidance practices could be depriving the UK exchequer of around £500 million. This amount could, in theory, have been used for a £500 payment to the poorest one million UK households to help with rising fuel bills.

Summary of findings

Amazon transparency hall of shame

The following universities rejected or did not respond to our FOI request:

• Aston
• Bath Spa
• Bedfordshire
• Birmingham
• Bolton
• Bradford
• Cambridge
• Cardiff Met
• Chester
• City University London
• Durham
• East Anglia
• East London
• Glyndwr
• Heythrop College
• London School of Hygiene
• London South Bank
• Middlesex
• Newcastle
• Nottingham
• Oxford
• Roehampton
• Royal College of Art
• Staffordshire
• Teesside
• Southampton
• Sussex
• University of the Arts London

Powers of persuasion

UK universities mainly buy goods and services with Amazon through an automated 'Amazon Business' account or through staff procurement cards. They also make indirect purchases with the company through vouchers given to students and staff as rewards and incentives from corporate partners, with 69% of universities increasing their voucher spend in recent years.

Amazon has increased its presence in the higher education sector by employing regional relationship managers to upsell products and services to existing university customers. For example, a UK university that already uses Amazon Web Services might be encouraged to sign up to Amazon Business or install Amazon lockers on UK campuses to deliver direct to students.

The strategy has allowed Amazon to increase its selling power with participating institutions year-on-year. For example, University of Wolverhampton, one of the top five highest proportional spenders on Amazon (Table 1) also has one of the longest standing procurement relationships with the company. A spokesperson for the university, which had the fourth largest spend with Amazon relative to its overall procurement in 2021, said: “We were one of the first Universities to move to Amazon Business, which may explain the larger spend activity as we may have been using [the service] for a longer period.”

Possible solutions

For decades, universities have relied on external providers to manage their supply chains and automated purchasing requirements. In the UK, an organisation called Crown Commercial Services (CCS) is the biggest buying group for all public sector organisations.

Earlier this year CCS launched a 'tail spend solution' that could help universities make more responsible

spending choices. Both suppliers that have been awarded contracts under the framework – Unite and OT Group – had to meet official sustainability standards and prove that their services benefit “society and the economy, while minimising damage to the environment.”

Unite, which has a procurement portal called Mercateo and OT group whose version is called SmartPad, could both help universities reduce their reliance on Amazon.

Progress in some places

A number of Amazon-wary institutions have also limited purchases through the company by honing their card spending. Three and a half years ago Satchwell, from De Montfort University and quoted above, convinced his executive team to introduce a directive to restrict spending on Amazon, eBay and Airbnb over health and safety concerns. He said that this gave him an opportunity to talk to staff and academics about the ethics of buying on Amazon. Under the new arrangements, procurement card holders at the university can only purchase through Amazon where there are no viable alternative options.

Alongside this Satchwell’s team said that all voucher awards should go through Love to Shop, a gift card that can be spent at a range of retailers, including Amazon.

“If they want to [shop at Amazon], the recipient is making that ethical choice and commercial choice – we’re not doing so on their behalf and endorsing a big business with questionable ethics sitting behind it.”

University of Wolverhampton has also introduced payment card restrictions to limit its Amazon spending and avoid products by third-party sellers on the platform.

And University of the West of Scotland is planning to review its card spending following a significant increase in transactions with larger online retail organisations, such as Amazon, over the past two years.

“During the Covid-19 pandemic, University of the West of Scotland encouraged the use of Corporate Procurement Cards for transactions under £1,000 to support the successful rapid transition to flexible and hybrid delivery across our remote five campus network in the UK,” a university spokesperson said. “A procurement review will be carried out in September 2022, to analyse which online retail organisations are currently being used, and the appropriateness of continuing to use specific suppliers.”